My 2019 Masters Bets

I really enjoy the Masters. And I also enjoy betting on the Masters. Below are my 2019 Masters bets. I don’t do much fundamental analysis to determine my bets. I don’t attempt to handicap the players chances of winning. I simply rely on technical analysis.

This year I’m considering the difference in the odds between exchanges such as Betfair and sports books where I have an account. I notice that the odds of favourites on Betfair is close to their price at most sports books, but the odds of players with slim chances of winning are much lower on sports books than on betting exchanges. For example, at the time of writing, the odds for Rory McIlroy is 8.6 on Betfair and is between 8 and 9 on most sports books. But the odds of Kevin Tway, who is one of the least likely active tour players is 950 on Betfair but only about 300 on most sports books. Ian Woosnam seems like the least likely player to win the Masters this week, and interestingly his odds on Betair are 950 (which is the practically highest price Betfair will post) and his odds on many sports books are about 3000.

These odds make sense to me because they follow the principal of short paying the longest odds. Sports books and casinos in general frequently make their profits by short paying the biggest payoffs. Its more difficult for gamblers to intuitively estimate the odds of less frequent events, and there is also a psychological element attached to gamblers who win a long shot and quickly forget to examine the true odds of their wager.

So it looks like the players in the second tier of golfers at this year’s Masters have the best value if you’re betting on a mainstream sports books. Here are my three value picks at these prices on Tuesday afternoon.

Paul Casey @ 31

Hideki Matsuyama @ 34

Xander Schauffele @ 46

Some other interesting bets. Top Canadian?  Conners/Weir 1.22/4.00. I would choose Conners at that price. Based on Weir’s recent Masters records, and the fact that he hasn’t really made a mark on the PGA Tour in a few years, and Corey Conners is a second time Masters starter and just coming off his win, and Conners is a the prime of his career. I think its also likely both Conners and Weir miss the cut, but I still think its very likely Conners gets a lower score.

Best German? Kaymer/Langer 1.77/2.00. This is a funny bet since Kaymer is a regular tour player but hasn’t had much success lately, whereas Langer is the best senior player on the planet. I think giving the edge to Kaymer is fair since Langer will have a tougher time with distance and number of holes down the stretch. Remember that Champions Tour events are only 3 rounds and the courses are much shorter than PGA Tour.

Buy Bitcoins in Canada with Shakepay

Shakepay is a app for Canadians to buy and sell cryptocurrency in less than 10 minutes using an Interac e-transfer. Shakepay is the easiest way for Canadians to buy and sell bitcoins and purchasing at least $100 worth of bitcoin with Shakepay also makes you eligible to receive a $10 bonus on your purchase.

 

Click here to get started with Shakepay and claim your $10 deposit bonus

 

  • Download the Shakepay app or use the Shakepay website to singup

Visit the Shakepay website or download the Shakepay app from Google Play or the App Store.

 

  • Register your account by submitting your personal information

You will be asked to provide your real name and address, its the law in Canada that companies like Shakepay must verify your identity.

 

  • Verify your account by confirming your phone number

Shakepay will send you a text with a verification code to confirm your phone number. This two-factor authentication is used to verify your identity and also to prevent others from accessing your account. You will receive a text with a 6 digit code.

 

  • Click the Add Funds button to make a deposit

You will see a button at the bottom of the app to “Add Funds”, click this button to display a list of deposit methods.

 

  • Choose the Interac e-transfer deposit method

 

  • Follow the deposit instructions

Open your online banking (app or website) and send an e-transfer to funding@shakepay.co. Use your username as the security question and a code provided by Shakepay as the security answer.

 

After sending your e-transfer, it will take Shakepay a few minutes to receive it and confirm your deposit. After your deposit is received, you’ll be able to exchange your Canadian dollar deposit for bitcoins and ether, doing so for at least $100 will entitle you to receive a $10 bonus on your deposit.

Visit the Shakepay website or download the Shakepay app from Google Play or the App Store and use this link to become eligible for the $10 bonus on your deposit.

 

Kraken Futures vs Deribit Futures

Recently Kraken, a popular cryptocurrency exchange, launched a futures trading platform. Their new futures contracts include short term and a perpetual contracts. Crypto traders will be familiar with their perpetual contract as its similar to those traded on Deribit and Bitmex.

The Kraken & Deribit perpetual contracts are virtually the same, and therefore trade at almost identical prices. Their virtual fungibility should probably also help keep them both liquid since market makers can arb each contract against the odds. Both contracts are cash settled. Kraken’s futures use the CME CF Reference Rates as their index. Kraken now owns Crypto Facilities, which also supports the CME reference rates (the “CF” stands for Crypto Facilities). The Deribit contracts settle off a similar index (which is set by Deribit) but which uses similar sources to construct their index. You can visit both company’s websites to find the details of they way they construct their indexes. The only other thing to say about index construction is that I would prefer a 3rd party index provider to reduce potential conflicts of interest (this favors Kraken over Deribit).

The perpetual contracts trade very close to spot. But they essentially settle each day and in some cases several times each day, so a funding rate is either paid or received by open interest depending on whether there is a premium or discount on the contract each period. Please examine the contract specs closely and make sure you understand the funding mechanism before trading these contracts.

Deribit Perpetual Futures Contract Specs

Kraken Perpetual Futures Contract Specs

BitMex Perpetual Futures Contract Specs

Calculating a profit or loss is pretty easy, you simply take the number of contracts you’re short or long multiplied by [(1/Entry Price) – (1/Exit Price)].  For example, if you are long 10 contracts at 3000 and you sell them at 4000, then your profit = 10 * [(1/3000) – (1/4000)] = 0.0008 btc.  Since all of these futures contracts are priced in btc, that why we have to calculate profit in a bit of a convoluted way.

Which contracts are the best?  It depends on what you’re trying to do. Deribit offers 100x leverage, so either this gives you more speculative leverage, or allows you to put up less capital to hedge, but the Kraken platform is better for users who want to link their fiat money to crypto. With Kraken you can verify your account and this will allow you to use fiat to crypto. But if you want to remain anonymous, then you’re better off using Deribit, because they don’t need to know who you are. With Kraken you get some regulatory oversight, this might reduce some of the credit risk associated with keeping money on an exchange.

Deribit also has options listed, so if you might need this extra functionality, then Deribit might be a better venue. I also like how Deribit has a rudimentary affiliate system, this might encourage greater exchange liquidity. Although Kraken offers discounts to orders that provide liquidity.

What are CLAM coins?

CLAM coins are one of the oldest crypto currencies and were forked from bitcoin and created in 2014. What made CLAM coins unique is they were mined using a Proof of Stake method. This makes them different than bitcoin because mining rewards are determined based on the share of coins a miner is “staking” rather than the computing power they contribute to the blockchain as is the way bitcoins and other “proof of work” blockchains work.

Current GIC Rates (27/02/19)

Canadian GIC rates have decreased since my last update during December. Now at the end of February, the forward curve is sloping upward (no more higher kink in the 1-2 year rates) but the spread between 1 and 5 year rates has shallowed from 0.74% to 0.55%, which implies a very low premium for locking money up for 5 years compared to just 1 year. The 5 year ladder yield is currently, 2.67% compared to HISA rates of 1.60% on demand deposits.

Click here to view current GIC rates

QuadrigaCX Bankruptcy Odds

Recently QuadrigaCX declared bankruptcy and filed for creditor protection. In the meantime their website is down and the exchange has ceased operating.

What are the odds that depositors will receive anything within a year’s time?  I’ve posted a fixed odds betting market on this question at coinroster.com. Click here to view the odds of QuadrigaCX depositors getting anything within a year’s time.

You can play and bet for free at CoinRoster.com by using code oscars2019 when you signup. Anyone can post bets with custom odds and terms once they’ve made a deposit to CoinRoster.com

Oscars 2019 Best Picture Odds

Free bets on best picture for the 2019 Oscars are available at CoinRoster.com

Roma is the clear favorite to win best picture this year. With odds of 1.8, this implies Roma has a 55% chance of winning. Green Book and The Favorite are the two next most likely to win with odds of 4 and 9 respectively.

Click on this link to receive 0.0003 bitcoins for free (worth about $1 USD at the time of writing). The free bitcoins can be used to make a bet on the Oscars and can be withdrawn after a 3x playing requirement is met.

Common Investment Terms

Below is a list of common investment terms with basic explanations.

Accrued Interest – Interest due from issue date or from the last coupon date to the security settlement date. Interest that has accumulated on a bond since its most recent regular interest payment date. The buyer of the security pays the accrued interest to the seller and recoups a full payment on the next payment date.

Amortization – The process where, as time passes, your fixed income investment moves inexorably to its face value or maturing value.

Balloon – The maturing principal of a bond issue.

Bank rate – The Canadian equivalent of the discount rate. This is the minimum rate of interest that the Bank of Canada charges on one-day loans to financial institutions. In December 2000, the Bank began setting the level of the Bank Rate – and with it, the target for the overnight rate – on eight fixed dates per year.

Basis point – 1/100 of a percentage point. It is often used to explain changes in bond yields. A 12 basis points increase in yield would mean a yield increase of 0.12 percentage points (e.g. 6.24 percent to 6.36 per cent is an increase of 12 basis points).

Benchmark – This refers to bonds by which others are valued. The Bank of Canada issues bonds at strategic maturity points (typically two, three, five, 10 and 30 years). When issuers bring new bonds to market, the presence of the Bank of Canada issues makes pricing easier since accurate market yields are readily available as references or benchmarks.

Bid price – The highest price a prospective buyer or dealer is willing to pay.

Bid size – The quantity (face value) of a security the highest bidding buyer wants to purchase.

Bid yield – The yield at which the highest bidding buyer is willing to purchase a security.

Bond – Evidence of a debt that is owed by a borrower who has agreed to pay a specific rate of interest, usually for a defined time period. At the end of that period the debt is repaid. Legally, a bond has assets pledged against the loan. In practice, the word is applied to any kind of term debt, collateralized or not.

Buy order– An order to purchase a security.

Callable – A bond that can be redeemed by the issuer, prior to its maturity date. Certain conditions have to be met.

Call price – The price at which a callable bond can be bought back by the issuer.

Certificate of deposit – A fixed income security issued by a chartered bank. Minimum purchase amount is usually $1000 with terms of from one to seven years.

Commercial paper – Short-term debt instruments issued by non-financial corporations. They have maximum maturities of one year.

Convertible bond– A bond containing a provision that permits conversion to the issuer’s common stock at some fixed exchange ratio.

Coupon – The annual rate of interest on the bond’s face value that a bond’s issuer promises to pay the bondholder. That portion of a bond that provides the holder with an interest payment at a pre-specified rate. Quoted at an annual rate, but usually paid semi-annually. A certificate attached to a bond evidencing interest due on a payment date.

CUSIP number – The Committee on Uniform Security Identification Procedures, which was established under the auspices of the American Bankers Association to develop a uniform method of identifying municipal, government and corporate securities.

Dealer – A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling for his own account.

Debenture – A debt that is secured solely by the general creditworthiness of the issuer and not by the collateralization or lien against specific assets.

Description – Short-form notation used to distinguish a particular issue. Typically follows the following protocol Issuer_Coupon_Maturity (i.e. CAN 8.75 12/05).

Detailed information– Information data set. Contains the CUSIP number, Description, Bid Price, Ask Price, Bid Yield, Ask Yield, Bid Size, Ask Size, Coupon, Maturity and Credit Ratings (CBRS, Moody’s and S&P).

Discount – The amount by which a bond sells below its par (or maturity) value.

Discount securities – Non-interest bearing money market instruments that are issued at a discount and redeemed at maturity for full face value; e.g. Treasury bills.

Downward yield curve – This refers to an abnormal yield curve where the shorter the term to maturity, the higher the yield. It occurs typically when a central bank is determined to snuff out an inflationary cycle.

Duration – The average life of your fixed income investment. A ten-year bond is not exactly a ten-year bond. All the interest payments shorten the average term. The bigger the interest payments, the shorter the duration. For a zero coupon bond, maturity and duration are the same since there are no cash flows to worry about. This term is used in measuring risk.

Extendible bond – An issue with a stated maturity date that under specific conditions gives the holder the right to extend the maturity for a further period.

Face value – Underlying principal amount of a security. The value of a bond that appears on the face of the certificate. It is almost always the maturity value of the bond. It is not an indication of current market value.

Flat yield curve – This refers to a yield curve where yields are the same at all maturities. ‘Flat’ can also mean that a bond is trading with no accrued interest, either because the settlement date coincides with the coupon payment date or else the issuer is not able to make interest payments.

Humped yield curve – This refers to a yield curve where some anomaly pushes yields at one or more maturity dates out of line with surrounding maturities.

Issuer – The entity (government or corporation) that borrowed the capital and is responsible for repaying the bondholder.

Income bond – A bond that pays interest only when earned by the issuer.

Inventory – To facilitate the retail and institutional clients, investment dealers maintain inventory of ‘shelf products’ financed with their own capital and which are offered at competitive prices.

Jobbers – Approved money market dealers who must bid for each week’s treasury bill auction.

Limit order – An order that is restricted in price.

Long term bond  – One that matures in more than 10 years.

Make a market – A dealer is said to make a market when he quotes bid and offered prices at which he stands ready to buy and sell.

Market order – An order that is priced to move with the current market price. It must be executed as soon as possible at the best possible price.

Maturity date – The date on which the security matures is the day that the issuer must repay the amount borrowed plus interest to the holder of the note.

Medium term bond – One that matures in from 3 to 10 years.

Money market – A wholesale, financial market specializing in low risk, highly liquid debt instruments (bills, commercial paper, bankers’ acceptances and corporate paper) with terms to maturity of less than 1 year.

Moody’s rating – Method of credit analysis. A guide of relative bond value.

Municipals – Securities issued by local governments and their agencies.

Municipals (MUNI) notes – Short term notes issued by municipalities in anticipation of tax receipts, proceeds from a bond issue, or other revenues.

Offer price – The price at which a dealer will sell the securities.

Offer size – The quantity (face value) of a security that is offered for sale.

Offer yield – The yield at which a security is offered for sale.

Off the run – This refers to a bond issue that is not a ‘benchmark issue’. It may have a very high or low coupon, it may be a small illiquid issue, its ownership may be concentrated in few hands or it may have a feature, which makes it unattractive to trade. The bid-ask spread will be wider for such an issue, because dealers either do not wish to hold them in inventory or if they do, find it difficult to sell them quickly.

Order – An order is an expression of interest to either buy or sell an instrument.

Over the counter – This essentially means ‘not centralized’. Unlike the equity market, which has a recognizable physical location to trade stocks, the bond market is decentralized, without one meeting place; transactions occur verbally or electronically between markets.

PAR – Price of 100%. The principal amount at which the issuer of a debt security contracts to redeem that security at maturity, face value.

PAR value – The stated face value of a bond. It has no connection with the same expression that sometimes relates to common stocks. Also referred to as Face Value or Par.

Positive yield curve – This refers to a ‘normal’ yield curve, one in which the longer the term to maturity, the higher the yield.

Price – The dollar amount one or more parties are willing to pay/receive to purchase/sell a security. Price is typically expressed per $100 of Par Value.

Principal – What you lend. This value is expected to be returned to you at the bond’s maturity date.

Provincials – Securities issued by provincial governments and their agencies.

Quote – An indication of interest to either buy or sell.

Redeemable – This is similar to callable bonds but with one huge difference. Normally issued by corporations, a redeemable bond may be ‘called’ by the issuer but not for financial advantage; in other words, the issue may not be redone at a lower coupon rate. Rather, should a company have surplus cash or in the event of a corporate development the bond issue may be retired prematurely.

Reinvestment risk – There are two basic risks. The first is that the yield to maturity quoted on a bond may not be realized, since all interest payments never get reinvested at the same rate. Second, you will experience this risk if you have your entire portfolio maturing at the same time, and rates have fallen dramatically.

Residuals – The principal portion left over after all the interest payments have been stripped away.

Retractable – An issue that gives the holder the option, under certain circumstances, to redeem his holdings at their face value, prior to the final maturity date.

Sell order – An order to sell a security.

Settlement date  – The month, day, and year the transaction will settle. As per industry standards, settlement usually occurs 3 business days after trade date (“T+3”) for Equities.

Fixed Income securities settle as follows:

Canadian, US T-Bills and Commercial Paper: T+1
GOC Bonds with an unexpired term of 3 years or less to maturity: T+2
All other Fixed Income instruments, including all Strip Bonds: T+3

Short sale – The sale of securities not owned by the seller in the expectation that the price of these securities will fall or as part of an arbitrage. A short sale must eventually be covered by a purchase of the securities sold.

Sinking fund – Indentures governing corporate issues often require that the issuer make annual payments to a sinking fund, the proceeds of which are used to retire randomly selected bonds in the issue.

Spread – Difference between bid and offered prices on a security.
Difference between yields on (or prices of) two securities of differing sorts or differing maturities.
In underwriting, difference between price realized by the issuer and price paid by the investor.
Difference between two prices or two rates. What a commodities trader would refer to as the basis.
Stripped bonds A bond that has had all its coupons removed, thus creating a series of zero coupon issues, the maturity dates of which are the interest payment dates of the coupon, as well as the originally established maturity date. Generally sold at a discount.

Summary information – Information data set. Contains the CUSIP number, Description, Bid Price, Offer Price, Bid Yield, Offer Yield, Bid Size, Offer Size.

Trade – A trade is a transaction. A trade has a buyer and a seller as well as a price and quantity.

Trade date – The date on which a transaction is initiated. The settlement day may be the trade date or a later date.

Treasury bill – Discount instruments issued by the federal government at a weekly auction. The T-bills generally have original maturities of 13 weeks (3 months), 26 weeks (6 months) and 52 weeks (1 year).

Two-sided market – Market in which both a bid and an offered price, good for the standard unit of trading, are quoted.

Two-way market – Market in which both a bid and an offered price are quoted.

Volatility – How much the price of a bond changes for a given movement in yield.

Yield – The interest rate expressed as an annual percentage that the funds will earn or cost over the term of the security.

Yield curve – The relationship between the various maturities of same credit quality issues. The curve for Government of Canada bonds sets the base of relationships for the Canadian market. For a description of the various forms of yield curves, please see Downward yield curve, Flat yield curve, Humped yield curve and Positive yield curve.

Yield to maturity – The rate of return yielded by a debt security held to maturity when both interest payments and the investor’s capital gain or loss on the security are taken into account. The return that an investor will receive if an issue is held to its maturity date and all coupons, as they are received, are re-invested at that yield level.

Zero coupon bond – A bond that pays no interest throughout its life. Zero Coupon Bonds (Zeros) sell at a discount to maturity value. The discount represents the return on the original investment, if the bond is held to its maturity date. The bonds are usually created using interest payment dates of a regular issue.

Click of this link to visit Deribit, a bitcoin derivatives exchange.